The Best Stock in Alaska: Alaska Communications

We scoured the nation to identify the best stock in every state. Alaska Communications Systems Group (ALSK) is the publicly traded company we picked in Alaska. The company headquarters is located in Anchorage.

A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.

Alaska Communications by the Numbers

• Headquarters: Anchorage
• Share price: $2.14
• Market value: $112 million
• Price-earnings ratio: NA

(Prices and data are as of June 22, 2017)

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Alaska Communications is one of only two telecommunications firms providing telephone and internet service in the Last Frontier.

Isolation has its advantages, says Eric Kuby, co-manager of North Star Opportunity Fund, which holds the stock. For instance, he says, the company owns two undersea fiber-optic routes connecting Alaska to the continental U.S. A company looking to set up shop in Alaska would be better served buying Alaska Communications than spending the money to duplicate its infrastructure.

In the past few years, the company has deployed gobs of cash to build a best-in-class fiber network. That has sapped earnings, as has the company’s commitment to paying down debt. Overall sales inched up in the first quarter compared with the same period a year earlier, but broadband revenues grew 11%, boding well for the company’s internet services segment. Alaska plans to buy back $10 million worth of stock through 2019 and may even initiate a dividend in the next couple years, says Kuby. Shares represent a good value for patient investors, he says.